Treasury plans outsourcing option

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The Treasury Department has joined the list of agencies interested in managed services, with plans to give its bureaus an option of outsourcing some or all of their voice and data network services.

Managed services, in which an agency pays strictly for a service and lets the contractor worry about how it's delivered, will be available through the Treasury Communications Enterprise contract, a departmentwide contract that also may be open to other departments.

The telecommunications contract, which Treasury plans to award by April 2004, is expected to be worth $3 billion over seven to 10 years.

The contract is not just the upgrade of the current Treasury Communications System (TCS), but a completely different business model, said Patrick Hargett, director of enterprise information technology planning and operations at Treasury. He was speaking Feb. 24 at the Federal Networks 2003 conference sponsored by TeleStrategies Inc.

The bureaus will decide the extent to which they outsource their network, if at all, with vendor performance measured by strict service-level agreements with built-in performance incentives, Hargett said.

"The intent is to implement performance-based contracts with realistic service-level agreements that can be easily validated," he said.

This is an approach other agencies have adopted for large network contracts, including the Navy Marine Corps Intranet and the Transportation Security Administration's Information Technology Managed Services program.

The TCE contract will also include a focus on "technology infusion," ensuring that the leading-edge commercial products and services are brought into the contract for users as soon as possible, he said.

The department plans to kick off planning for the contract next month and spend approximately six months working with users and industry on requirements and the acquisition strategy. Officials then plan to release the request for proposal in September.

Since the final option year on TCS expires in 2005, the planned April 2004 TCE award date will give the department approximately 18 months to gently transition bureaus over to the new contract, Hargett said.

The department also is setting the contract up as a vehicle for other agencies, positioning TCE as an alternative to other telecommunications contracts, such as the General Services Administration's FTS 2001 program, Hargett said.

Several of Treasury's bureaus that are shifting to the Homeland Security and Justice departments have already requested permission to continue using the Treasury contracts, he said.